04/18/23

Financial Aid: Getting your Financial Aid: Getting your Fair ShareFair Share

By Dennis ByeMember National Financial Aid Practitioner’s Alliance

04/18/23

Introduction Introduction

Cost of Education Ivy League 60,000 Private 47,000 State School 29,000 Public schools up 2.9%

Private schools up 3.7%Inflation 1.7%Source CEEB

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MythsMyths

Myth 1 Middle Income Families Don’t Qualify for Aid

Myth 2 You Cannot Impact Aid Eligibility Myth 3 Only Students with good grades

qualify Myth 4 You have to be a minority to get

financial aid

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The Financial Aid FormsThe Financial Aid Forms

FAFSA

PROFILE

These forms are necessary for Federal, State, and/or Institutional Aid

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DeadlinesDeadlines

Filing financial aid forms late may cost you money

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Many Families Find These Many Families Find These Forms Confusing and Forms Confusing and IntimidatingIntimidating

And Experience Hours of Frustration Trying to Complete Them

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Family Assets and IncomeFamily Assets and Income

Are Among the Many Factors Assessed to Determine Aid Eligibility

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The Information from the The Information from the financial aid forms financial aid forms is calculated inis calculated in

NEEDS ANALYSES FORMULAS

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The Weighting of this The Weighting of this Information Establishes YourInformation Establishes Your

EXPECTED FAMILY CONTRIBUTION (EFC)

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……. This is How Much the . This is How Much the Government Feels You Can Government Feels You Can Afford to PayAfford to Pay

Ouch!!!

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Cost of AttendanceCost of Attendance

Tuition and Fees Room & Board Books, Travel & Personal

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Financial Need

COLLEGE COST - EFC =NEED

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EFC ExampleEFC Example

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Need Based AidNeed Based Aid

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Aid Comes FromAid Comes From

Federal > Grants > Loans > Work Study

State > Grants > Scholarships

College > Grants > Loans

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Federal Grants and LoansFederal Grants and LoansPell Grant $5,730SEOG $4,000

Perkins Loan $5,500 5%Sub Stafford $3,500 4.66%

Unsub Stafford $3,500 4.66%

PLUS Loan 7.21% 4.29%

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State Programs State Programs www.hesaa.orgwww.hesaa.org

TAG county 2,318,St College 6,326, Ind College 10,468, Rutgers 8,554, NJIT 9,692

NJ Class Loans 5.49% 3% orig fee 10 yr.6.65% 3% orig fee 15 yr8.05% 3% orig fee 20 yr

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Financial Aid AwardsFinancial Aid Awards

The Award LetterThe Award Letter

Compare Packages No Absolutes

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Award LetterAward Letter School A B Cost 30,000 30,000 Family Cont. 10,000 10,000 NEED 20,000 20,000

Students Loans 3,500 4,500 Work Study 1,500 2,000 State Aid 2,000 2,000 Grant 13,000 5,500 TOTAL $20,000 $14,000

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Public vs. Private CollegePublic vs. Private College

Rutgers LoyolaTotal Cost $29,875 Total Cost $59,320Need $19,875 Need $49,320% need fully met 12% %need fully met 95%Financial aid eligibility $2,385 Financial aid eligibility $46,854Gift aid 46% $1,099 Gift aid 70% $32,797Self help 54% $1,287 Self help 30% $14,056Out of pocket cost $27,461 Out of pocket cost $12,467Total cost - gift aid $28,776 Total cost - gift aid $26,523

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Maximizing Aid EligibilityMaximizing Aid Eligibility

Understanding The Federal Formula May Save You

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ASSET VALUATIONASSET VALUATION

INCLUDED Cash Savings Stocks Bonds Mutual Funds Real Estate Business

EXCLUDED Retirement Accounts Cash Value of Life

Insurance Annuities Primary Residence (Federal Only Family Farm (Federal

Only Consumer Assets Consumer Debt

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Parent Income Protection Parent Income Protection AllowanceAllowance

Family of 4…. $25,000 Family of 5….$30,000 Family of 6….$35,000

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Asset Protection AllowanceAsset Protection Allowance

Age 46…. $47,700 Age 47…. $47,900 Age 48…. $50,100 Age 49…. $51,300 Age 50…. $52,900

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How Many Family Members How Many Family Members are Attending College ?are Attending College ?

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Understand The Logistics For Understand The Logistics For Proper Filing Of Special Proper Filing Of Special ConditionsConditions

Single-Separated-Divorced Parents Loss of Employment...

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Retirement ContributionsRetirement Contributions

IRA’S401K’s As Income?TSA’S As Assets?

Are included as untaxed income on the financial aid forms. The value of these accounts are not included as an asset.

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How Do I make My Child How Do I make My Child Independent?Independent?

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VERIFICATIONVERIFICATION

THE PROCESS OF SUBSTANTIATING FINANCIAL AID INFORMATION

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EDUCATION TAX EDUCATION TAX INCENTIVESINCENTIVES

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American Opportunity CreditAmerican Opportunity Credit

100% OF THE FIRST $2,000.0025% OF THE NEXT $2,0000.00

Phaseout $180,000 MFJ$90,000 S,H of H

Available all four years of undergraduate education

Use form 8863 education credits

Available for the first four years of post secondary ed.Up to $2,500 per eligible student

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Lifetime Learning CreditsLifetime Learning Credits

20% of the first $10,000 (no limit to the number of years) can be used for non degree study. Up to $2,500 credit per return

Phase-out: $127,000 MFJ$63,000 S, H of H

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Student Loan Interest DeductionStudent Loan Interest DeductionCan reduce income up to $2500.00$155,000 MFJ$75,000 SHH

Can take this with claiming American Opportunity CreditLifetime Learning Credit

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Tuition and Fees Deduction from Tuition and Fees Deduction from IncomeIncome

Reduce Income by up to $4000.00

Limits: $ 160,000 MFJ $ 80,000 SHH

Can not take this deduction if claiming American Opportunity Credit or Lifetime Learning Credit

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SECTION 529 PLANSSECTION 529 PLANS

DISTRIBUTIONS ARE TAX FREE FOR EDUCATION

“ ASSETS of the OWNER”

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What I can do for youWhat I can do for youEnsure you will qualify for the maximum amount of aid you are legally entitled to!Calculate your EFCExpertly complete the financial aid formsAdvise how to pay what isn’t subsidized with financial aidAdvise you on the most tax efficient way to pay for collegeRemain a year-round resource for your financial planning needs!

Website www.financialaidnj.com

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Services ProvidedServices Provided

Ensure you qualify for the maximum amount of Financial aidCalculate your expected family contributionComplete the FAFSAComplete the CSS Profile if requiredAdvise how to pay the balance that is not subsidized with financial aidAdvise you on the most tax efficient way to pay for collegeProvide planning recommendations to potentially reduce your EFCAdvise on where to get the lowest interest loans for which you qualifyKeep you appraised of changes in financial aid on the national and state levelAdvise you on which colleges are likely to give the most financial aidReview award letters for fairnessRemain a year round resource for your financial planning needs